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CenturyLink, Inc. (NYSE: CTL) and Savvis, Inc. (Nasdaq: SVVS) today announced that their boards of directors have approved a definitive agreement under which CenturyLink will acquire all outstanding shares of Savvis common stock in a cash and stock merger valued at $40 per share, or a total of approximately $2.5 billion, plus net debt of approximately $0.7 billion which will be assumed or refinanced at close.

Under the terms of the transaction, Savvis stockholders will receive $30 per share in cash and $10 in shares of CenturyLink common stock, subject to adjustment as described below. The consideration represents an 11% premium over Savvis’ closing stock price as of the close of trading on April 26, 2011 and a premium of 53% compared to Savvis’ stock price at the beginning of the year.

With the addition of Savvis, CenturyLink will achieve global scale as a managed hosting and colocation provider and will accelerate its ability to deliver quality managed hosting and cloud capabilities to its business customers. The combination of CenturyLink’s hosting and network assets with Savvis’ proven solutions in colocation, managed hosting and cloud services substantially enhances CenturyLink’s capabilities and provides the company with a solid platform for future growth.

“The transaction creates a premier managed hosting and colocation provider with global scale in a high growth sector, and is expected to be accretive to revenue growth and cash flow per share,” said Glen F. Post, III, CenturyLink chief executive officer and president. “Today, businesses are shifting the way they manage their information technology services and infrastructure, and this transaction helps us meet these needs by offering Savvis’ leading products and services coupled with CenturyLink’s network. We look forward to working with the Savvis team to leverage CenturyLink’s significant scale and scope to fully realize the potential of Savvis’ capabilities for our combined customers, while also enhancing value for our shareholders and providing opportunities for our employees.”

“As migration to cloud-based services continues to accelerate rapidly, a strategic combination was a natural choice to create significant scale and become part of a large global network for the benefit of our customers, stockholders and employees,” said James E. Ousley, chairman and chief executive officer of Savvis. “We believe that combining our proven capabilities in cloud infrastructure and managed hosting with CenturyLink’s hosting assets and large base of business customers will create powerful opportunities to accelerate growth. We also look forward to making the full resources of a much larger network infrastructure available to our customers.”

Together, CenturyLink and Savvis will operate 48 data centers located in North America, Europe, and Asia with more than 1.9 million square feet of gross floor space; a robust, national 207,000 route mile fiber network; a 190,000 mile global access network; and have a customer list that includes a majority of the Fortune 500 and Fortune 1000 companies.

The acquisition of Savvis is expected to improve CenturyLink’s revenue, EBITDA and free cash flow growth profile. CenturyLink expects to realize approximately $70 million in full run-rate annual operating cost and capital expenditure synergies. The transaction is expected to be accretive to CenturyLink’s free cash flow per share, excluding integration costs, in the first full year following the close.

CenturyLink anticipates integrating its hosting business and Savvis’ managed hosting and cloud services into a single CenturyLink business unit. This integrated hosting business will be based in St. Louis and led primarily by key members of the Savvis leadership team, including Savvis CEO James Ousley, who will head the unit. Following the closing of the transaction, CenturyLink will employ approximately 50,000 people based on the total number of CenturyLink and Savvis employees as of April 26, 2011.

Transaction Details

Under the terms of the merger, Savvis shareholders will receive in exchange for each Savvis share $30 in cash and $10 in CenturyLink shares, subject to adjustment as described below. The number of CenturyLink shares issued will be based upon the volume-weighted average price of CenturyLink stock during the thirty trading day period ending three trading days prior to the closing, provided that if this average price is less than or equal to $34.42, each Savvis share will receive $30 in cash and 0.2905 of a CenturyLink share. The transaction is subject to the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, along with other customary closing conditions, including review by the Federal Communications Commission and international regulators. The transaction also is subject to the approval of Savvis stockholders. CenturyLink has entered into an agreement with Welsh, Carson, Anderson & Stowe VIII, L.P. and certain related parties who collectively own approximately 23 percent of Savvis’ outstanding stock to vote their shares in favor of the transaction. The transaction will be taxable to Savvis shareholders for federal income tax purposes. The companies anticipate closing the transaction in the second half of 2011. CenturyLink has received a commitment letter from Bank of America Merrill Lynch and Barclays Bank PLC for bridge debt facilities aggregating up to $2 billion to fund a portion of the acquisition and refinancing of Savvis’ current debt.

CenturyLink and Savvis will host a conference call with the financial community today, April 27, 2011, at 8:30a.m. EDT / 7:30a.m. CDT to discuss this morning’s announcement. The conference call will be webcast live over CenturyLink’s website at www.centurylink.com and over Savvis’ website at www.savvis.com. Interested parties also can join the call by dialing (866) 847-7860 (international: (703) 639-1427) 15 minutes prior to the start of the call.

CenturyLink, Inc. (NYSE: CTL) and Qwest Communications today completed their merger, creating the nation’s third largest telecommunications company in the United States. The combined company’s increased scale and financial strength will enable it to deliver a broader range of communications services to consumers and small businesses throughout the company’s 37-state service area and to business, wholesale and government customers nationwide via its 190,000 route-mile fiber network.

“The combination of our two companies allows us to offer customers of all sizes an even more robust portfolio of communications solutions that will continue to be backed by honest and personal service,” said Glen F. Post, III, chief executive officer and president of CenturyLink. Continue reading →

CenturyLink (CenturyTel, Inc., NYSE: CTL) and Qwest Communications (NYSE: Q) announced today that their boards of directors have approved a definitive agreement under which CenturyLink will acquire Qwest in a tax-free, stock-for-stock transaction.

PAETEC Holding Corp. (NASDAQ GS: PAET), which provides data, voice and Internet solutions to business-class customers nationwide, today announced full year financial guidance for the fiscal year ending December 31, 2009.

“Continued strong cash flow and new sales have provided stability for PAETEC and we are pleased to guide investors for the remainder of 2009,

PAETEC Holding Corp. (NASDAQ GS: PAET) has closed its previously announced senior secured notes offering. The Company issued senior secured notes in an aggregate principal amount of $350 million in a private offering to institutional investors. The senior secured notes have a fixed interest rate of 8 7/8% and mature in 2017.

“We were pleased that the offering was well-received by the debt market, which enabled us to complete the offering within a short timeframe,” said Arunas A. Chesonis, chairman and CEO. “By extending our debt maturities, we now have enhanced financial flexibility to invest in our network, customer support, and expansion of our product suite. Over our 11 years, our conservative fiscal management has allowed PAETEC to thrive in times where others have not.”

As previously announced, the Company used the net proceeds from the offering to repay a portion of the loans outstanding under PAETEC’s existing senior secured term loan credit facility.

“PAETEC’s history of disciplined financial management has enabled the Company to access the capital markets opportunistically,” said Keith Wilson, chief financial officer. “The continued support from the financial community is a solid validation of our long term strategy and being a competitive communications market leader.”

Additional information about the senior secured notes offering will be contained in the Company’s current report on Form 8-K to be filed with the Securities and Exchange Commission. Continue reading →

XO Communications (OTCBB: XOHO) today announced the availability of a new flexibility program for current and prospective customers using XO Wavelength, a service that employs dense wavelength division multiplex (DWDM) technology to provide network capacity. The forward-thinking program allows customers to pay a flat, one-time fee to make changes to their high-capacity networks, thereby helping them to respond to evolving business demands while avoiding costly early termination fees and new service initiation contracts.

With XO Carrier Wavelength FLEX, Carrier Services’ customers can be assured that internal or external events impacting their data demands are met with flexible, cost-effective adjustment options. After identifying reconfiguration needs, customers simply pay a flat fee for XO to implement changes. For the fee, customers will have the ability to: Continue reading →

Banverket ICT has completed a successful live field trial, running 10G/40G/100G simultaneously on its existing fiber network between Sundsvall and Stockholm, using a Nortel* [TSX: NT | OTC: NRTLQ] optical solution. The trial, completed on April 2nd over a total fiber distance of 810km, is the first live trial of its kind in the Nordic region.